Capova: High-Risk Merchant Accounts and Alternative Lending
All figures before taxes.
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Costs
One-time costs hit Year 1 only.
One-time (Year 1)
LLC + Trademark filing$
Fixed recurring (annual)
Shared virtual office$
Phone / video conferencing$
Domain registration$
Lovable (CRM + site + tools)$
Claude Cowork$
ChatGPT Go$
Google plan (Drive + NotebookLM)$
Canva (canceled)$
Apollo (prepaid annual)$
Contingency / misc buffer$
Total fixed recurring$1,515
High-Risk Merchant funnel
| Channel | Emailed / yr | % to Pipeline | % to Application | % Approved | % Primary | MIDs | Primary |
|---|---|---|---|---|---|---|---|
| Already Open (initial pile, Year 1 only) | % | % | % | % | 420 | 147 | |
| Not Open Yet (fresh pile each year) | % | % | % | % | 551.3 | 385.9 | |
| Total (Year 1) | 971.3 | 532.9 | |||||
Existing works a one-time initial pile in Year 1 only. New Business and Alt-Lending draw a fresh pile of data every year, so their new accounts recur each year.
Merchant economics
Primary avg monthly volume$
Residual rate (bps)
Residual split %%
Churn / closed %%
Ancillary monthly / primary$
Upfront / boarded account$
Net monthly residual / primary$50
Primary monthly recurring / account$60
Merchant 5-year buildup
| Line | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Primary new logos | 532.9 | 385.9 | 385.9 | 385.9 | 385.9 |
| Primary ending active | 532.9 | 785.5 | 975.0 | 1117.1 | 1223.7 |
| Primary recurring | $383,670 | $565,583 | $702,017 | $804,343 | $881,087 |
| Upfront revenue (new MIDs) | $0 | $0 | $0 | $0 | $0 |
| MERCHANT TOTAL REVENUE | $383,670 | $565,583 | $702,017 | $804,343 | $881,087 |
| Monthly recurring run-rate (year-end) | $31,973 | $47,132 | $58,501 | $67,029 | $73,424 |
| Annual residual (run-rate x12) | $383,670 | $565,583 | $702,017 | $804,343 | $881,087 |
Alternative Lending
Value-add channel with renewals.
Intent companies found / month
Annual emailed3,600
Emailed to Pipeline %%
Pipeline to Application %%
Application to Funded %%
Commission per funded deal$
Funded deals (Year 1)12.6
Renewal Year 1 to 2 %%
Renewal Year 2 to 3 %%
Renewal Year 3 to 4 %%
Renewal Year 4 to 5 %%
| Line | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| New funded deals | 12.6 | 12.6 | 12.6 | 12.6 | 12.6 |
| Renewed deals (sliding) | 0 | 6.3 | 7.6 | 6.0 | 4.7 |
| Active funded deals | 12.6 | 18.9 | 20.2 | 18.6 | 17.3 |
| ALT-LENDING REVENUE | $12,600 | $18,900 | $20,160 | $18,648 | $17,262 |
| Renewal revenue (in-year) | $0 | $6,300 | $7,560 | $6,048 | $4,662 |
Combined cash flow and return
| Line | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Merchant total revenue | $383,670 | $565,583 | $702,017 | $804,343 | $881,087 |
| Alt-lending revenue | $12,600 | $18,900 | $20,160 | $18,648 | $17,262 |
| TOTAL REVENUE | $396,270 | $584,483 | $722,177 | $822,991 | $898,349 |
| Fixed recurring | $1,515 | $1,515 | $1,515 | $1,515 | $1,515 |
| One-time setup | $1,050 | $0 | $0 | $0 | $0 |
| TOTAL COST | $2,565 | $1,515 | $1,515 | $1,515 | $1,515 |
| NET (before taxes) | $393,705 | $582,968 | $720,662 | $821,476 | $896,834 |
| ROI (revenue / cost) | 154.5x | 385.8x | 476.7x | 543.2x | 593.0x |
| 10X rule | PASS | PASS | PASS | PASS | PASS |
Capova entity valuation
Reference only, never selling.
| Line | Year 3 | Year 5 |
|---|---|---|
| Merchant annual residual | $702,017 | $881,087 |
| Merchant residual value (3x annual) | $2,106,051 | $2,643,261 |
| Alt renewal book (annual income) | $7,560 | $4,662 |
| TOTAL CAPOVA VALUE | $2,113,611 | $2,647,923 |
Merchant residual valued at a fixed 3x annual residual. Alt renewal book shown as annual renewal income, not a sale.
Year 1 at a glance
Total revenue$396,270
Net before taxes$393,705
ROI154.5x